Sunday, July 08, 2012

Drugs, violence and trade: the sad tale of the US war on drugs

Indi has written something on the US war on drugs. There is a sad and twisted tale behind this and its roots lie in, of all things, a failed trade policy.

The tale starts with protectionism for the US sugar industry. This started as far back as 1934 but was tightened in the 1970's. Under pressure from the sugar industry import quotas were tightened. Sugar imports from the Caribbean dropped from around 6m tonnes in 1977 to around 1.2m tonnes by 1998, impoverishing many small nations. Therefore it is hardly surprising that farmers there found coca a more attractive crop and the underground American drug industry a more willing trading partner.

Sugar protectionism costs American consumers billions while providing the narcotics industry with its primary produce.

A second strand in this tale is the horrific violence that the Mexican drug cartels, enriched by the lucrative trade with the US have unleashed. Unfortunately, one of the lesser known facts is that the Mexican cartels buy their weapons, quite legally, from across the border.

Not only does the US create the lucrative market (the emphasis on cutting supply, rather than demand keeps drugs prices high, enriching traffickers), force farmers south of the border to turn to illegitimate crops, they also arm the gangs. Some have expressed fears that the drugs violence in Mexico can spill over into the US, but it is rotten US policy that is igniting the region.

Cutting the Gordian Knot of problems is well nigh impossible, but legalising distribution and consumption will help. Abolishing the protectionism that impoverishes the Caribbean and hurts American consumers and industry will also help, but there is another twisted evil, that bars reform: campaign finance by special interest groups. The NRA prevents a sensible gun policy and the sugar industry perverts trade policy but unless campaign finance is reformed so that these minority groups can no longer pull the strings of policy nothing is possible.

My simple suggestion is that private funding be abolished entirely, the state can give each candidate a small fixed sum and no further spending or funding (including "gifts" of free airtime) is permitted. Politicians can then concentrate on policy, instead of fund raising and end up having to spend the entire of their tenure serving the special interests of their donors.

Source: I picked up the information on the impact of US sugar protectionism on Caribbean farmers from Todd Buchholz's book.